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BHP seeks acquisitions

Marius Kloppers,
CEO, BHP Billiton
Melbourne, Australia — MININGREVIEW.COM — 09 February 2009 – BHP Billiton Limited – the world’s largest mining company – may seek to acquire mines and plants from distressed sellers, and says some of the Rio Tinto Group’s properties would fit well into its portfolio.

“BHP has stable cash flows and a strong balance sheet, and is keen to acquire tier one assets that may become available,” said CEO Marius Kloppers. “Rio’s 30% stake in Chile’s Escondida copper mine would fit tremendously well,” he added, but declined to say whether BHP had made an approach.

“On any individual negotiation, as a lot of these things are going on, I just can’t comment,” Kloppers told the Australian Broadcasting Corporation’s Inside Business programme.

Bloomberg News reports that BHP has joined Xstrata Plc and Rio Tinto in closing mines and cutting jobs as the global recession cuts demand. “With less than 10% of its assets funded with debt, the company can be very competitive in bidding for any assets coming to market that fit its strategy,” Kloppers said.

BHP owns 57.5 % of Minera Escondida Limited – operator of the world’s largest copper mine – in partnership with Rio Tinto and a group of investors led by Mitsubishi Corporation.

Rio rejected a US$66 billion (R660 billion) takeover offer from BHP last year, and is in talks with parties including Aluminum Corporation of China and Amcor Limited on asset sales, as it seeks to reduce debt.

“A cash bid for Rio is probably not possible, given U.K. takeover rules and the cooling off period BHP had indicated when its earlier offer lapsed,” Kloppers said. “Still, companies in several parts of the market are coming under financial stress and will need to sell assets to meet short- term needs,” Kloppers added.